This invention relates generally to investment products, and in particular to an investment fund for maximizing a risk-adjusted expected return while providing a defined minimum income at maturity.
Investment options that are currently available to most individuals suffer from a number of drawbacks. For example, individual retirement programs, such as 401 (k) retirement accounts, typically involve a participant contribution to the retirement account and sometimes involve an employer contribution to the retirement account. The participant's contribution is often directed by the participant into a set of funds or other available investment options. The employer's contribution is traditionally invested in the same investment product as the participant's contribution—or worse, in the employer's own stock. These options have significant shortcomings. In particular, individuals usually do not have access to a number of financial services and benefits that are available to more sophisticated investors, so the performance of their retirement accounts is likewise limited. In addition, self-directed investments typically do not contain an optimal mix of assets because most individuals are not sufficiently sophisticated, and because an investor's optimal asset mix typically changes over time. Although there are some existing funds that automatically change their risk profile over time, they do not hold instruments that guarantee a minimum lifetime income to the investors.
Due to the shortfalls of existing investment options available to most investors, it would be desirable to provide an investment fund that can maximize a risk-adjusted expected return while providing a defined minimum income at maturity.